Wal-Mart, the Coast Guard, and Hurricane Katrina

In my relentless attempts at self-promotion, I'm happy to announce that my policy study for the Mercatus Center on the role of the private sector (and the Coast Guard) during Hurricane Katrina, focusing on Wal-Mart, is now available on the web. This study is part of Mercatus' larger project on Katrina, all of which is well worth perusing. Here's the link and the executive summary:

Many assume that the only viable option for emergency response and recovery from a natural disaster is one that is centrally directed. However, highlighted by the poor response from the federal government and the comparatively effective response from private retailers and the Coast Guard after Hurricane Katrina, this assumption seems to be faulty. Big box retailers such as Wal-Mart were extraordinarily successful in providing help to damaged communities in the days, weeks, and months after the storm. This Policy Comment provides a framework for understanding why private retailers and the Coast Guard mounted an effective response in the Gulf Coast region. Using this framework provides four clear policy recommendations:

1.Give the private sector as much freedom as possible to provide resources for relief and recovery efforts and ensure that its role is officially recognized as part of disaster protocols.

2. Decentralize government relief to local governments and non-governmental organizations and provide that relief in the form of cash or broadly defined vouchers.

3. Move the Coast Guard and Federal Emergency Management Agency (FEMA) out of the Department of Homeland Security (DHS).

4. Reform "Good Samaritan" laws so that private-sector actors are clearly protected when they make good faith efforts to help.

If disaster situations are to be better handled in the future, it is important that institutions are in place so that actors have the appropriate knowledge to act and incentives to behave in ways that benefit others. The framework and recommendations provided in this paper help to provide a good understanding of the appropriate institutions.

More Comments:

Robert Higgs -
3/24/2008

I find nothing to fault here, Steve. As one of those on the receiving end of Katrina's destruction (nature's effects being greatly magnified by the Corps of Engineers' ineptitude and negligence), I can testify that the Coast Guard was the ONLY government agency I saw doing any real good. All of the others--federal, state, and local--were either ineffectual or harmful in rescue, relief, and recovery efforts, and FEMA was the most harmful of all, and still is, though now Congress has put its dirty hands to work politicking every step taken, thereby rendering the entire undertaking nothing but another gigantic farce cum boondoggle.

As for real rescue, relief, and recovery, the important actors were, in decreasing order of importance: we, the local people, who simply set to work to help ourselves and our neighbors; businesses, such as Wal-Mart, Home Depot, and others, and most of all the utility companies that, acting in accordance with their long-established procedures for bringing utility repairmen from all parts of the country in emergencies, were vital in restoring tele-communications and electricity distribution; church groups, both as organizations and as single churches, indeed, often as single parishioners who simply came here and found useful work to do; and finally the governments, which were more useful at the local level than at the state level, and more useful at the state level than at the federal level.

In other words, Katrina illustrates in a striking way pretty much what a classical liberal would have expected to see: for the most part, the effectiveness and good will of individuals and private organizations, and the ineffectiveness, destructiveness, and de facto cruelty of governments. Whuda thunk?